The Collaborative International Dictionary of English v.0.48:

Misapplication \Mis*ap`pli*ca"tion\, n.
   A wrong application. --Sir T. Browne.
   [1913 Webster]

WordNet (r) 3.0 (2006):

misapplication
    n 1: wrong use or application
    2: the fraudulent appropriation of funds or property entrusted
       to your care but actually owned by someone else [syn:
       embezzlement, peculation, defalcation,
       misapplication, misappropriation]